* ‘Small cell’ technology deemed promising
* Small cells can be attached to lamp posts, buildings
* Sprint plans small cells for year end, AT&T; to test
* Possible boost for Ericsson, Alcatel Lucent, other
equipment makers
By Sinead Carew
NEW ORLEANS, May 11 (Reuters) – Top U.S. mobile operators
are turning to a new type of equipment known as small cells to
boost network capacity in the face of a shortage of wireless
spectrum.
With consumer demand for wireless data services like mobile
video streaming growing sharply, network operators say they need
access to more wireless airwaves soon or they will risk running
out of capacity to support their customers.
Since it may be years before enough new spectrum becomes
available, operators are looking for technology solutions now to
try to avoid network congestion that could send customers away
in frustration or stunt industrywide revenue growth.
As a result, operators came to the CTIA annual wireless
showcase in New Orleans this week keen to discover how they
might use existing spectrum more efficiently.
One promising area is so-called small cells – mini versions
of the giant wireless broadcast towers that send and receive all
the cell phone calls carried by today’s networks. Installing
these small cells in between the bigger towers will boost
capacity in those areas.
Since these devices have smaller price tags and are more
compact than traditional cell sites, operators will be able to
place them more easily in buildings or even on lamp posts on
busy city streets.
Various types of small cells were on display by network
equipment makers at the New Orleans trade show. Wireless
carriers do not expect the first products to come to market
until later this year, and they say it is still too early to
estimate total costs for using the technology.
CAPACITY CRUNCH
AT&T; Inc and Sprint Nextel, the No. 2 and No. 3
U.S. mobile providers, both said at the CTIA trade show that
they already have plans for small cells. Market leader Verizon
Wireless and No. 4 player T-Mobile USA say they are looking at
the technology and eyeing future developments.
The trend could be a boost for equipment makers such as
Ericsson, Alcatel Lucent and Nokia Siemens,
a venture of Nokia and Siemens.
Sprint plans to start installing small cells late this year
to boost indoor coverage, particularly in sports arenas and
similar locations before expanding the technology to outdoor
areas in congested markets in 2013.
“The driver comes down to the need over time to get more out
of your spectrum,” Bob Azzi, network senior vice president at
Sprint, told Reuters on the sidelines of the CTIA show on
Wednesday. “The technology is maturing to the point that it is
feasible to start.”
Azzi said Sprint would consider products from vendors such
as Alcatel Lucent and Nokia Siemens.
Global Mobile data traffic is expected grow at a compound
annual rate of 78 percent between 2011 and 2016, according to
research from network equipment maker Cisco Systems Inc
. Cisco estimates that two-thirds of global mobile data
traffic will come from video by 2015.
Since video is one of the most bandwidth-hungry
applications, AT&T; said it sees the strong consumer demand for
mobile video streaming as the biggest driver of
network-management improvements in the coming years.
AT&T; plans to start testing small cells in its network late
this year or early next year. Since it failed last year in its
bid to acquire T-Mobile USA and gain more spectrum, it says it
needs to boost capacity somehow.
“Spectrum is a limited quantity. You’ve got to continuously
look for innovation to drive capacity and coverage,” Kris Rinne,
AT&T; senior vice president for network technologies,
architecture and planning, told Reuters.
LOWER COST
Rinne said that since deployment has yet to kick off, it is
too soon to estimate the cost of installing small cell. But Ovum
analyst Daryl Schoolar said that the new devices could cost
anywhere between $2,000 and $10,000 depending on the model,
compared with the roughly $30,000 investment for traditional
cell sites.
Ericsson marketing manager Hans Beijner said, however, that
cost would not likely be the main motivation for operators to
install the new products. “You do it because it’s the only
solution” to boost capacity, he told Reuters at the show.
In the United States and Europe in particular, Beijner said
that operators have a tough time gaining planning permission
from local authorities to build more cell towers.
Small cells, however, are designed to be much easier to
attach to building exteriors, or onto existing street
infrastructure such as lamp posts, he said.
Beijner estimated that, on average, operators would install
one to three of these small cells for every large cell in their
network in the next five years.
However, some U.S. operators may be slower to adopt the
technology. In particular, U.S. operators want more advancements
in small cells to be used in networks based on Long Term
Evolution, a high-speed wireless technology they are currently
using to upgrade their networks.
T-Mobile USA needs to bolster its network capacity to catch
up with its bigger rivals in providing higher-speed services to
customers.
“In the next couple of years you’ll see small cell
deployment on a larger basis,” said T-Mobile USA Chief
Technology Officer Neville Ray, who is waiting for industry
standards defining the technology to develop further.
Verizon Wireless is also keenly watching the technology but
Tony Melone, the chief technology officer for parent company
Verizon Communications, said, “It’s just not quite ready.”
Verizon Wireless is a venture of Verizon Communications Inc
and Vodafone Group Plc. T-Mobile USA is a venture
of Deutsche Telekom.
